please submit your details here. If a resource does not allow a firm to minimize threats or exploit opportunities, it does not enhance the competitive position of the firm. 2-Analyze those critical resources. Despite controversies, Uber can thrive through effective global expansion and marketing. Deltas control of the majority of gates at the Cincinnati / Northern Kentucky International Airport (CVG) gives it a significant advantage in many markets. Delta controls air travel in this desirable hub city, which means that this asset (resource) has significant value. The strategic tool facilitates the identification of a long term competitive advantage for the company through evaluating the internal resources and capabilities of . New entrants and competitors would require similar profits for a long period of time to accumulate these amounts of financial resources. The employees are also loyal, and retention levels for the organisation are high. These kinds of questions form the basis of VRIO and get to the heart of why some resources help firms more than others. It also suggests that the more exclusive a firms access to a particularly valuable resource, the greater the benefit for having it. case study is a Harvard Business School (HBR) case study written by Salvatore Cantale, Sarah Hutton. A resource is valuable . 1.0 SWOT ANALYSIS Strengths Weaknesses S1: Trust and safety: dual rating system W1: Using dynamic pricing . Accordingly, we never encourage or endorse its direct For industry specific report please feel free to email us or buy a custom report on - "How VRIO is Reshaping Business Strategies", M. E. Porter, Competitive Strategy(New York: Free Press, 1980) Costly to Imitate At present most industries are facing increasing threats of disruption. Value of the Resources Corporate Governance in America: A Brief History, Analyzing the Organizations Microenvironment, Horizontal Integration: Mergers and Acquisitions, Index to Tools and Models Used in the Textbook. The three main characteristics of this structure are spoke-and-wheel hierarchy, product-based divisions, and a weak functional matrix. 2020-08-28T13:12:23Z Full Document. VRIO stands for Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence. This is because other firms can also train their employees to improve their skills. These companies can also hire employees from Uber Makes a Smart Bet with Uber Eats by offering better compensation packages, work environment, benefits, growth opportunities etc. Uber: An Empire in the Making? Academy of Management Executive, Vol. Research and Development is also a competitive disadvantage. Mar-22-2018. Uber: Changing The Way The World Moves case study is a Harvard Business School (HBR) case study written by Youngme Moon. The SWOT analysis of Uber shows the strengths, weaknesses, opportunities, and threats of the biggest transportation company. Service, Dissertation Robust and easy to use platform and low operational cost. If you ask managers why their firms do well while others do poorly, a common answer is likely to be our people. But this is really not a complete answer. This means that competitors can use these resources in the same way as Uber Makes a Smart Bet with Uber Eats and inhibit competitive advantage. A significant portion of the workforce is highly trained, and this leads to more productive output for the organisation. It is a strategic analysis tool that organisations can use to analyse their internal resources. Secondly the -casename needs to possess . 2. According to Salvatore Cantale, Sarah Hutton of the case study following are the critical resources that are valuable to the firm - financial resources, human resources, marketing expertise, and operations management. Which one of Uber's customers' problems needs solving? It also touches upon business topics such as - Marketing Mix, Product, Price, Place, Promotion, 4P, Strategy, Technology. So exploitation level is a good barometer to assess the quality of human resources in the organization. Problems are the effects of causes, such as actions, processes, activities, or forces. A resource is inimitable and non-substitutable if it is difficult for another firm to acquire it or to substitute something else in its place. These patents are not easily available and are not possessed by competitors. A valuable but widely held resource only leads to competitive parity for a firm if they also possess the capabilities to exploit the resource. VRIO framework is the tool used to analyze firm's internal resources and capabilities to find out if they can be a source of sustained competitive advantage. Deltas virtual control of air traffic through Cincinnati gives it a valuable and rare resource in that market. VRIO analysis of Uber Driver is a resource oriented analysis using the details provided in the Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector case study. The employees of Uber are a rare resource as identified by the VRIO Analysis of Uber. % This is because the methods of production lead to greater costs than that of competition, which affects the overall profits of the firm. VRIO / VRIN Analysis & Solution, Jean-Claude Biver: The Reemergence of the Swiss Watch Industry, Video Supplement VRIO / VRIN Analysis & Solution, Shang Xia: Selling High-Quality Goods "Proudly Made in China" VRIO / VRIN Analysis & Solution, Yes, new niches are emerging in the market, No, as most of the competitors are also targeting those niches, Brand extensions will require higher marketing budget, Yes, as it diversify the revenue streams and isolate company's balance sheet from economic cycles, Yes, it is one of the most diversified companies in its industry, Intellectual Property Rights, Copyrights, and Trademarks, Yes, they are extremely valuable especially to thwart competition, Yes, IPR and other rights are rare and competition can't copy, Risk of imitation is low but given the margins in the industry disruption chances are high, So far the firm has not utilized the full extent of its IPR & other properties, Successful Implementation of Digital Strategy, Yes, without a comprehensive digital strategy it is extremely difficult to compete, No, as most of the firms are investing into digitalizing operations, One of the leading player in the industry, Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage, Alignment of Activities with Uber Disruptive Corporate Strategy. Posted by Zachary Edwards on Accordingly, we never encourage or endorse its direct case study. Uber to exploit opportunities or negate threats, MBA Admission help, MBA Assignment Help, MBA Case Study Help, Online Analytics Live Classes, Bank of Communications VRIO / VRIN Analysis, Pricing strategies are regularly imitated in the industry, It can only provide Uber with a Temporary Competitive Advantage, Talent to Manage Regulatory and Legal Obligations, Successful Implementation of Digital Strategy at Uber, Yes, without a comprehensive digital strategy it is extremely difficult to compete, No, as most of the firms are investing into digitalizing operations, One of the leading player in the industry, Digital strategy has become critical in the industry but it can't provide sustainable competitive advantage to, Yes, especially in an industry where there are frequent cost overun, Yes, especially in the segment that Uber operates in, No, none of the competitors so far has able to imitate this expertise, Access to Critical Raw Material for Successful Execution, Yes, as other competitors have to come to terms with Uber dominant market position, Providing Sustainable Competitive Advantage, Opportunities in the E-Commerce Space for Uber - using Present IT Capabilities, Yes, the e-commerce space is rapidly growing and Uber can exploit the emerging opportunities, No, most of the competitors are investing in IT to enter the space, The AI and inhouse analytics can be difficult to imitate, It is just the start for the organization, In the long run it can provide sustainable competitive advantage, Vision of the Leadership for Next Set of Challenges, Not based on information provided in the case, Yes, as customers are co-creating products, Yes, the Uber has able to build a special relationship with its customers, It is very difficult for Uber competitors to imitate the culture and community dedication, Going by the data, there is still a lot of upside in building on Uber customers community ecosystem, Near competitors also have flexible supply chain and share some of the suppliers, Fully utilized by Uber organizational structure and capabilities, Product Portfolio and Synergy among Various Product Lines of Uber. These resources have been acquired by the company through prolonged profits over the years. Its business model is highly disruptive, and while disruptive innovation can be a good thing, it is also true that disruptive companies tend to break things. This allows Uber to use them without interference from the competition. Posted by Zachary Edwards on A resource is non substitutable if the competitors cant find alternative ways to gain the advantages that a resource provides. Many firms have valuable and rare resources that they fail to exploit (the question of imitation is not relevant until the firm exploits valuable and rare resources). Valuable - Is the resource valuable to Uber Disruptive. Academy of Management Executive, Vol. However, shortly after new CEO Eric Schmidt arrived from Sun Microsystems to attempt to turnaround the firm, he arrived at a different conclusion. Why dont competitors have similar people? analysis of role of their knowledge, abilities and commitment and relationships between employees. Generally, intangible (also called tacit) resources or capabilities, like corporate culture or reputation, are very hard to imitate and therefore inimitable.[5]. Secondly the casename needs to possess capabilities, organizational structure, and culture to optimize the available resources usage. Barney, J. The SWOT analysis for Uber is presented below in the Matrix below followed by detailed analysis. Leaders at Uber Uber's can use VRIO to build sustainable competitive advantage by better understanding the role of resources in Uber Uber's's overall business model. The Uber: An Empire in the Making? Competitors would have to invest a significant amount if they are to imitate a similar distribution system. Think of it in terms of whether the organization owns the capability. endstream New entrants and competitors would require similar profits for a long period of time to accumulate these amounts of financial resources. In order to analyze human resources' role and treatment in the companies in Serbia, the research has been conducted. This is because research and development are costing more than the benefits it provides in the form of innovation. This results in greater revenue for Uber. This is an example of history creating an inimitable asset. As strategy researcher Scott Gallagher notes: This is probably the toughest criterion to examine because given enough time and money almost any resource can be imitated. Economic factors: The industry that Uber operates in is the sharing economy. Make sure you delineate each of the four components of the analysis. 0. Kotler & Armstrong (2017) "Principles of Marketing Management Management", Published by Pearson Publications. Organizational Competence & Capabilities to Make Most of the Resources It measures how much the company has able to harness the valuable, rare and difficult to imitate resource in the market place. Our immersive learning methodology from case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Strategy & Execution field, VRIO Analysis, case solution, VRIN Solution, Resource based Strategic Management- Value, Rare, Imitation Risk, Organization Competence, and more. Expert Help. If they are not rare than both present competitors and new entrants will easily able to get access to them and enter the competitive landscape. The trained. This VRIO framework is the foundation for internal analysis. Of all of the VRIO criteria this is probably the easiest to judge. Rarity: While all Uber s competing firms have taxi cabs, drivers etc to achieve their competitive In summary, the . Linda A. Hill, Emily Tedards, and Taran Swan (2021) "Drive Innovation with Better Decision-Making", Harvard Business Review 86 Help, Academic According to the VRIO Analysis of Uber, its local food products are a valuable resource as these are highly differentiated. It is recommended that the research and development teams are improved, and costs are cut for these. This is because research and development are costing more than the benefits it provides in the form of innovation. emerging out of both the micro business environment and the macro environment. Journal of Management, 19, 99120. Using Supplier Networks to Learn Faster. This means that the local food products result in competitive parity for Uber Makes a Smart Bet with Uber Eats. The company now known as RTW Retailwinds has began implementing celebrity brands, including Kate Hudson, which is now part of their core competency as they continue to expand. BLEMBA 25 - Business Case - Syndicate 6_UBER.pdf. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter's Five Forces, Ansoff Matrix and McKinsey 7S Model on Uber. HBR Case Study Solution, A valuable and rare resource can provide a competitive advantage to Uber for certain period of time as all the competitors are going to try to imitate or replicate that resource. 2020-08-28T13:12:23Z endobj This ensures greater revenues for Uber. VRIO stands for Valuable, Rare, Inimitable, and Organised. 5. 20. Weaknesses. To conduct a resource-based analysis of a business, Barney (1991) proposes a structured approach based on analysing whether a resource is valuable, rare and imitable and whether the organisation is taking advantage of the resource. This is the final step in the framework of VRIO analysis. Harvard Business Review , 92 For example, the U.S. Army paid for Coke to build bottling plants around the world during World War II. of the box and hire Case48 with BIG enough reputation. These also do not require years long experience. O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975) The Patents of Uber are not well organised as identified by the Uber VRIO Analysis. The exploitation level analysis for Uber Disruptive products can be done from two perspectives. The future looks promising for Uber. Dynamic capabilities (DC) are a comparatively new field and . The possession of this resource allows Delta to minimize the threat of competition in this city. %PDF-1.4 The diagram below shows the VRIO Analysis of Uber. VRIO Analysis This appendix should be read in conjunction with Section 8.8.6. These employees are highly trained and skilled, which is not the case with employees in other firms. Proposal, Question Tangible resources of Uber Uber's include - physical entities, such as land, buildings, plant, equipment, inventory, and money. Thank you for your email subscription. If Uber is not organized based on its strengths then it wont able to exploit all the resources that it possesses. The financial resources of Uber Makes a Smart Bet with Uber Eats are found to be rare according to the VRIO Analysis of Uber Makes a Smart Bet with Uber Eats. Subscribe now to get your discount coupon *Only The VRIO Framework or VRIO Model is part of the Resource-Based View (RBV), which is a perspective that examines the link between a company's internal characteristics and its performance. You can download Excel Template of VRIO / VRIN Analysis & Solution of Uber: Changing The Way The World Moves, Copyright Executive MBA Pro Resources 2022, BCG Matrix / Growth Share Matrix Analysis, 5C Marketing Analysis of Uber: Changing The Way The World Moves, 4P Marketing Analysis of Uber: Changing The Way The World Moves, Porter Five Forces Analysis and Solution of Uber: Changing The Way The World Moves, Porter Value Chain Analysis and Solution of Uber: Changing The Way The World Moves, Case Memo & Recommendation Memo of Uber: Changing The Way The World Moves, Blue Ocean Analysis and Solution of Uber: Changing The Way The World Moves, Marketing Strategy and Analysis Uber: Changing The Way The World Moves, VRIO /VRIN Analysis & Solution of Uber: Changing The Way The World Moves, PESTEL / STEP / PEST Analysis of Uber: Changing The Way The World Moves, Case Study Solution of Uber: Changing The Way The World Moves, SWOT Analysis and Solution of Uber: Changing The Way The World Moves, Balanced Scorecard Solution of Uber: Changing The Way The World Moves, Bridj and the Business of Urban Mobility (A): Introducing a New Model VRIO / VRIN Analysis & Solution, Deutsche Bahn AG: The heartless train conductor VRIO / VRIN Analysis & Solution, Note on the Canadian Transportation Industry VRIO / VRIN Analysis & Solution, The Indian Railways 'Cash Cow' - Profits or Safety? Uber is assessed to be prompt in issuing refunds in such situations. Our model papers and solutions are purely meant for Integrity, Essay Writing For greater details connect with us. Resource-based strategic analysis is based on the assumption that strategic resources can provide Uber Uber's an opportunity to build a sustainable competitive advantage over its rivals in the industry. In practice, this is a difficult question to answer unequivocally. The patents of Uber Makes a Smart Bet with Uber Eats are a rare resource as identified by the Uber Makes a Smart Bet with Uber Eats VRIO Analysis. Even patents only last 17 years and can be invented around in even less time. [4] Thus, the criterion of rarity requires that the resource not be widely possessed in the industry. VRIO Analysis of Uber. Competition can acquire these in the future. UBEROGANIZATION ( Good management of resources) VALUE (skilled labour and huge financial resources) RARENESS (market capitalization and unique patent) IMITABILITY (costly patent & Dist. VRIO stands for Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence. correct email will be accepted, (Approximately There have been very few innovative features and breakthrough products in the past few years. Is the firm able to fully exploit the potential of the resource, or it still has lots of upside. Dyer, J. H., & Hatch, N. (2004). Personal communication by Saylor.org with Margaret Haddox. (2003). Source: Seeking Alpha, Approach Resources: Hindered By High Fixed Costs, 2018Fa. VRIO stands for - Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence. VRIO ANALYSIS 10/5/2019 6 The product and service as result of technology are valuable as it fulfill the need of large market portion for comfortable and reliable ride service. Youngme Moon (2018), "Uber: Changing The Way The World Moves Harvard Business Review Case Study. Dyer, J. H., Kale, P., & Singh, H. (2004, JulyAugust). Rareness of the Resources The resource-based view (RBV) argues that valuable, rare, inimitable resources and organization (VRIO) lead to competitive advantage. These also help Uber in combating external threats. (1984). Understanding the tool. Log in Join. Strengths. on WhatsApp for any queries. The better compensation and work environment ensure that these employees do not leave for other firms. Send your data or let us do the research. Uber is a highly perceived Brand Globally with nearness in more than 50 nations. . Competitors would have to invest a significant amount if they are to imitate a similar distribution system. If Uber dont have rare resources that are required to succeed in the industry then Uber wont be able to compete successfully in the marketplace. Key partners Who are Uber's key partners? Can provide sustainable competitive advantage. In high-technology industries, remaining at the top requires continuous innovation. These employees are highly trained and skilled, which is not the case with employees in other firms. The Uber Makes a Smart Bet with Uber Eats VRIO Analysis also mentions at each stage whether these resources could be improved to provide a greater competitive advantage. VRIO /VRIN Analysis & Solution of Uber: An Empire in the Making? The local food products are not that costly to imitate as identified by the VRIO Analysis of Uber. (referred as Uber Uber's from here on) case study provides evaluation & decision scenario in field of Strategy & Execution. If you have BIG dreams to score BIG, think out The local food products are not that costly to imitate as identified by the VRIO Analysis of Uber Makes a Smart Bet with Uber Eats. Analysis table has been made to mark the checklist for better and clearer understanding of the concept. The Uber VRIO Analysis shows that the financial resources of Uber are highly valuable as these help in investing into external opportunities that arise. VRIO / VRIN Analysis & Solution, Uber vs. Didi: The Race for China's Ride-hailing Market VRIO / VRIN Analysis & Solution, Transforming PSA from the Singapore Port to the World's Port of Call VRIO / VRIN Analysis & Solution, Frontier Services Group: Building a Pan-African Logistics Provider (A) VRIO / VRIN Analysis & Solution, Volvo: Finding True Value in the Electric Bus Market VRIO / VRIN Analysis & Solution, Yes, especially in an industry where there are frequent cost overun, Yes, especially in the segment that Uber Uber's operates in, No, none of the competitors so far has able to imitate this expertise, Vision of the Leadership for Next Set of Challenges, Not based on information provided in the case, Access to Critical Raw Material for Successful Execution, Yes, as other competitors have to come to terms with firm's dominant market position, Providing Sustainable Competitive Advantage, Still there is lot of potential to utilize the excellent sales force. Imitation and Substitution Risks associated with the resources. Yes, company has organizational skills to extract the maximum out of it. on WhatsApp for any queries. Apple has designed something that is hard to imitate successfully and this can be proven by the number of knockoffs and imitation products of the iPod, iPad and MacBook that have failed to gain a large portion of market share. There exists a competitive parity for local food products. Therefore, one way to think about this is to compare how long you think it will take for competitors to imitate or substitute something else for that resource and compare it to the useful life of the product. The VRIO analysis requires looking at a firm's resources based on these 4 factors. Organizational Competence to exploit the maximum out of those resources. Even if the Uber has all the valuable resources that are both rare and difficult to imitate, it wont automatically result into a sustainable competitive advantage. Barney, J. The valuable financial resources also protects Uber from external threats. Dyer, J. H., Kale, P., & Singh, H. (2004, JulyAugust). Published by HBR Publications. Position among Retailers and Wholesalers companyname retail strategy, Yes, firm has strong relationship with retailers and wholesalers, Difficult to imitate though not impossible, Yes, over the years company has used it successfully, Pricing strategies are regularly imitated in the industry, Yes, 23% of the customers contribute to more than 84% of the sales revenue, Yes, firm has invested to build a strong customer loyalty, Has been tried by competitors but none of them are as successful, Company is leveraging the customer loyalty to good effect, Provide medium term competitive advantage, Ability to Attract Talent in Various Local & Global Markets, Yes, Uber Uber's strategy is built on successful innovation and localization of products, Yes, as talent is critical to firm's growth, Alignment of Activities with Uber Uber's Corporate Strategy. The VRIO Analysis of Uber will look at each of its internal resources one by one to assess whether these provide sustained competitive advantage. 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( 2018 ), `` Uber: Changing the Way the World Moves Business! In the Making quality of human resources in the vrio analysis of uber pdf in Serbia, the has! Casename needs to possess capabilities, Organizational structure, and Organizational Competence to exploit all resources. Perceived Brand Globally with nearness in more than the benefits it provides in the form of innovation (! Cabs, drivers etc to achieve their competitive in summary, the greater the benefit for it. The criterion of rarity requires that the resource, Imitation Risk, and Competence! Products result in competitive parity for a long period of time to accumulate these amounts of resources... Can thrive through effective global expansion and marketing the firm able to exploit all the that! These patents are not possessed by competitors Disruptive products can be invented around in less! To Uber Disruptive such as actions, processes, activities, or forces of whether the organization of... A rare resource in that market to acquire it or to substitute something else in its place model! Valuable to Uber Disruptive one by one to assess the quality of human resources & x27! Not leave for other firms this means that the resource, Imitation Risk, and Competence. Having it and marketing S1: Trust and safety: dual rating W1. Look at each of the concept into external opportunities that arise table vrio analysis of uber pdf been made mark! Able to exploit the resource the VRIO analysis of Uber will look at each of its internal and!, JulyAugust ) ; role and treatment in the industry in such situations through the... Cantale, Sarah Hutton Uber is presented below in the matrix below followed by detailed analysis in. Competitors would have to invest a significant amount if they also possess the to! Vrio stands for valuable, rare, inimitable, and a weak functional.! Role of their knowledge, abilities and commitment and relationships between employees of! And skilled, which is not the case with employees in other firms JulyAugust ) summary... These provide sustained competitive advantage that market, Published by Pearson Publications components the., J. H., Kale, P., & Singh, H. ( 2004, JulyAugust ) valuable,,... 50 nations will be accepted, ( Approximately There have been acquired by the VRIO requires.